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Robert Salmon of Deutsche Bank downgraded shares of
United Parcel ServiceUPS to Hold from Buy with a $116 price target due to a “more balanced” risk to reward profile.
Salmon notes that shares of UPS have risen 9.5 percent since its last earnings report, outperforming the 2.6 percent increase in the S&P 500. The analyst adds that the outperformance was due to strong expectations for a better peak season and that the good news is fully reflected in current share prices.
Salmon defends his downgrade and explains that shares have only a 5.5 percent upside to his $116 price target, which is based on an 18.5 multiple on a 2016 earnings per share estimate of $6.28.
The analyst also reaffirms his fourth quarter earnings per share estimate of $1.45, noting the company is off to a “solid start” for the quarter.
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